As the Castro brothers fade into history, green shoots of civil society are visibly emerging in Cuba. Make no mistake: The Cuban Communist Party retains its authoritarian hegemony. Nevertheless, and largely unnoticed in the U.S. media, various interest groups are flexing their youthful muscles—and with some remarkable albeit very partial policy successes.

These unanticipated stirrings of civil society present a serious challenge to the cautious new president, Miguel Díaz-Canel, who assumed office this April. In recent weeks, three significant interest groups have pushed back against newly restrictive government regulations issued in the usual way: by government fiat, with few if any opportunities for public input. The new regulations aim to reduce profit margins of independent entrepreneurs, driving some out of business altogether, and to impose new censorship rules on cultural expression.

In response to these threats, the emerging private sector—some 600,000 employers and workers, over 10 percent of the workforce by official count—pressed the authorities to retract proposed limitations on individual capital accumulation. To everyone’s great surprise, the authorities suddenly offered significant concessions. Entrepreneurs will be able to own more than one business, the government agreed, and restaurant and bar owners will no longer face occupancy ceilings of 50 customers each.

Nevertheless, other restrictive anti-business clauses remain on the books. Apprehensive entrepreneurs are waiting to see whether government bureaucrats and inspectors apply their new discretionary powers with a light or heavy hand.

For their part, Cuba’s large army of cultural workers, in music, film, theater, and the visual arts, vigorously pushed back against draft regulations requiring prior approval of public performances and threatening censorship of “unpatriotic” content. At the last minute, again the government stepped back, agreeing to consult with representatives of the arts community prior to implementation.

In yet another challenge to government authority, Havana taxi owners and drivers staged an informal strike against a complex set of new rules. The government is seeking to impose burdensome reporting of all revenues and expenditures, higher effective taxes, more rigorous safety requirements for certain vehicles, and on some routes a lower ceiling on taxi fares. In protest and despair, many taxi drivers have turned in their licenses. Moreover, public buses are running less frequently, apparently due to scarcities of gasoline and spare parts. The result: a daily transportation headache for Havana’s work force.

The government has promised to import more buses. Meanwhile, the authorities seem incapable of foreseeing the practical outcomes on daily life of bureaucratic innovations. Intent upon raising tax revenues and imposing order over Havana’s unruly transportation grid, the authorities failed to anticipate the market-driven reactions of the regulated taxi owners and drivers.

In all three cases—the disgruntled business owners, the alarmed artistic community, and the frustrated taxi drivers—the civil protests took similar forms. Brave citizens signed carefully crafted letters, respectful but firm, addressed to ministers and President Díaz-Canel. (Some signatories reported subsequent government harassment, including menacing phone calls.) Spreading social media (on-island and offshore) buzzed with sharp criticisms of government policies. In a few notable cases, intrepid protesters gathered in public spaces, provoking brief police arrests. One prominent state TV program, “Mesa Redonda” (Roundtable), gave voice to some of the popular complaints, politely challenging official guests.

To access social media, most Cubans have had to locate scattered Wi-Fi hotspots. But this month the government has enabled 3G technology throughout the island. This belated entrance into the world of modern telephony may be another game changer. Cuban citizens who sport cell phones will now be empowered to upload immediately content to Facebook, WhatsApp, and Twitter.

These struggles over economic and cultural freedoms between the authorities and civil society come in the midst of a major re-write of the nation’s constitution. The Communist Party submitted a draft document for public comment in innumerable meetings convened throughout the island. Initial skepticism has given way to anticipation that the authorities may prove responsive to citizen suggestions and significantly amend the final draft, even as one-party rule and socialist planning will persist. A popular referendum on the new constitution is scheduled for late February.

Overall, the heated conversations over constitutional reform and the government’s responsiveness to civil society voices, however belated and partial, have raised hopes: Maybe post-Castro Cuba will gradually evolve toward a more responsive governance. Emboldened by cracks in government stonewalling, Cubans may seek to widen the space for civil society expression.

At the same time, while many welcome the young administration’s relative responsiveness to independent voices, some party stalwarts and ordinary Cubans accustomed to authoritarian rulers see only weakness and improvisation. Backsliding is certainly a feasible scenario. Already some anti-government skeptics see only one half-step forward, two steps backward.

Nevertheless, some Cubans harbor this aspiration: That President Miguel Díaz-Canel, who so far has championed continuity over change, will eventually gain the authority and confidence to tackle the other elephant in the room—the long-stagnant economy. For only comprehensive economic reforms could lift the economy from its deepening recession, the root cause of the government’s anxieties and the popular discontent.

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By Richard E Feinberg
As the Castro brothers fade into history, green shoots of civil society are visibly emerging in Cuba. Make no mistake: The Cuban Communist Party retains its authoritarian hegemony. Nevertheless, and largely unnoticed in the U.S. media, various interest groups are flexing their youthful muscles—and with some remarkable albeit very partial policy successes.
These unanticipated stirrings of civil society present a serious challenge to the cautious new president, Miguel Díaz-Canel, who assumed office this April. In recent weeks, three significant interest groups have pushed back against newly restrictive government regulations issued in the usual way: by government fiat, with few if any opportunities for public input. The new regulations aim to reduce profit margins of independent entrepreneurs, driving some out of business altogether, and to impose new censorship rules on cultural expression.
In response to these threats, the emerging private sector—some 600,000 employers and workers, over 10 percent of the workforce by official count—pressed the authorities to retract proposed limitations on individual capital accumulation. To everyone’s great surprise, the authorities suddenly offered significant concessions. Entrepreneurs will be able to own more than one business, the government agreed, and restaurant and bar owners will no longer face occupancy ceilings of 50 customers each.
Nevertheless, other restrictive anti-business clauses remain on the books. Apprehensive entrepreneurs are waiting to see whether government bureaucrats and inspectors apply their new discretionary powers with a light or heavy hand.
For their part, Cuba’s large army of cultural workers, in music, film, theater, and the visual arts, vigorously pushed back against draft regulations requiring prior approval of public performances and threatening censorship of “unpatriotic” content. At the last minute, again the government stepped back, agreeing to consult with representatives of the arts community prior to implementation.
In yet another challenge to government authority, Havana taxi owners and drivers staged an informal strike against a complex set of new rules. The government is seeking to impose burdensome reporting of all revenues and expenditures, higher effective taxes, more rigorous safety requirements for certain vehicles, and on some routes a lower ceiling on taxi fares. In protest and despair, many taxi drivers have turned in their licenses. Moreover, public buses are running less frequently, apparently due to scarcities of gasoline and spare parts. The result: a daily transportation headache for Havana’s work force.
The government has promised to import more buses. Meanwhile, the authorities seem incapable of foreseeing the practical outcomes on daily life of bureaucratic innovations. Intent upon raising tax revenues and imposing order over Havana’s unruly transportation grid, the authorities failed to anticipate the market-driven reactions of the regulated taxi owners and drivers.
In all three cases—the disgruntled business owners, the alarmed artistic community, and the frustrated taxi drivers—the civil protests took similar forms. Brave citizens signed carefully crafted letters, respectful but firm, addressed to ministers and President Díaz-Canel. (Some signatories reported subsequent government harassment, including menacing phone calls.) Spreading social media (on-island and offshore) buzzed with sharp criticisms of government policies. In a few notable cases, intrepid protesters gathered in public spaces, provoking brief police arrests. One prominent state TV program, “Mesa Redonda” (Roundtable), gave voice to some of the popular complaints, politely challenging official guests.
To access social media, most Cubans have had to locate scattered Wi-Fi hotspots. But this month the government has enabled 3G ... By Richard E Feinberg
As the Castro brothers fade into history, green shoots of civil society are visibly emerging in Cuba. Make no mistake: The Cuban Communist Party retains its authoritarian hegemony. Nevertheless, and largely unnoticed in the U.https://www.brookings.edu/opinions/cubas-stalled-revolution-can-new-leadership-unfreeze-cuban-politics-after-the-castros/Cuba’s stalled revolution: Can new leadership unfreeze Cuban politics after the Castros?http://webfeeds.brookings.edu/~/570602224/0/brookingsrss/topics/cuba~Cuba%e2%80%99s-stalled-revolution-Can-new-leadership-unfreeze-Cuban-politics-after-the-Castros/
Thu, 20 Sep 2018 15:43:11 +0000https://www.brookings.edu/?post_type=opinion&p=538084

In a leap backwards, the Cuban government has published a massive compendium of tough new regulations governing the island’s struggling private enterprises. The new regulations—the first major policy pronouncement during the administration of President Miguel Díaz-Canel—appear more focused on controlling and restricting the emerging private sector than on stimulating investment and job creation, more concerned with capping wealth accumulation than in poverty alleviation.

Many small businesses that cater to foreign visitors are already suffering from Trump-era restrictions and travel warnings that have decimated the U.S. tourist trade in Havana. But the new regulations are more a product of domestic Cuban politics than foreign pressures.

On a positive note, the Cuban government promises to renew the granting of licenses for many categories of private businesses by year-end, repealing the extended suspension announced last summer. But the new regulations greatly empower government rule-makers and intrusive inspectors, casting a gray cloud over the island’s business climate. Many existing businesses are likely to retrench if not close altogether.

The private sector grew dramatically in recent years, to include nearly 600,000 owners and employees by official figures, with many more enterprising Cubans working informally; in contrast, the state sector stagnated and further decapitalized. Indeed, many thriving private businesses began to compete successfully against state entities, notably in restaurants, bars and night clubs, guest houses, construction, and transportation. The healthy wages paid by profitable private firms often eclipsed the meager salaries paid to disgruntled government officials and factory workers.

The extensive, highly detailed regulations, which go into effect in December, read like “the revenge of the jealous bureaucrat.” Drawing on a multitude of ministries and operating at all levels—national, provincial, and municipal—interagency committees will now be empowered to authorize, inspect, and regularly report upon private businesses under their jurisdictions. The regulations are replete with astoundingly specific performance requirements and innumerable legal breaches that seem crafted to allow government officials wide discrimination to impose heavy fines (or extort bribes), suspend licenses, and even seize properties.

To cite but a few such regulations: Private restaurants and guest houses must cook food at a minimum of 70 degrees Celsius for the time required for each food; day care centers must allocate at least two square meters per child, have no more than six children per attendant, and be outfitted with pristine bathroom facilities described in exquisite detail (private schools and academies are strictly prohibited); and private taxi drivers must document that they are purchasing fuel at government gas stations, rather than buying on the black market. Further, local officials can deny new licenses based on “previous analyses,” even if the proposed business plan meets all the other specifications, and can fix prices “when conditions warrant.”

The regulations could help shield state enterprises from unwanted private competition. The very ministries that stand to lose market shares are in charge of approving licenses in their sector. For example, the ministry of tourism has the lead in judging licenses for private guest houses. Appeals are possible, but to administrative authorities, not to judicial courts.

Government agencies are also seeking to reassert control over the island’s vibrant artistic communities. The regulations prohibit artists from contracting directly with private restaurants and bars; rather they must be represented by public-sector entities that charge commissions up to 24 percent of revenues. Moreover, performers must not use “sexist, vulgar or obscene language,” which if enforced could imply the banning of popular hip-hop and reggaeton songs and videos.

Perhaps most telling are the restrictive rules squarely aimed at inhibiting private capital accumulation. In a sharp turn from past practice, Cubans will now only be allowed one license for one business, effectively outlawing franchising and diversification. Capacity at restaurants and bars is capped at 50 guests. Most biting, the new regulations establish an upward-sloping wage scale (whereby wages rise as more workers are hired); hiring more than 20 workers becomes prohibitively expensive (six times the average wage). Unlike in the past, employers will now have to pay taxes on the first five workers hired as well.

Many private businesses must also record their transactions (revenues and expenditures) in an account at a government financial institution and keep three months of prospective taxes on deposit. Intended to reduce underreporting of income, this measure will significantly raise the effective rates of taxation. Investors must also explain their sources of funds. In a country where political authority is unchecked, these financial impositions alone will discourage many potential entrepreneurs.

The Cuban authorities have repeatedly asserted their interest in attracting foreign investment, to compensate for weak domestic savings. However, foreign investors are likely to view these new regulations, even though they apply to domestically-owned firms, as indicative of an official wariness if not hostility toward private enterprise in general. Risk-averse foreign investors will also note that the Cuban government is quite capable of precipitously altering the rules of the game.

The new regulations are the first major policy initiative promulgated during the administration of President Miguel Díaz-Canel. Many of the resolutions were approved by the Council of State under Raúl Castro, prior to Díaz-Canel’s inauguration in April, but nevertheless were issued during his young tenure. Not a good sign for those hoping that Díaz-Canel, 58 years old and ostensibly representing a younger generation, might quickly place his own imprimatur over the extensive state apparatus.

The new regulations make one thing abundantly clear: The Cuban government, state-owned enterprises and the ruling Cuban Communist Party do not want to risk major competition to their own interests—economic, commercial, and political—from a potentially capital-rich, diversified emerging private sector. Apparently, perceived interests in security and stability have overruled Cuba’s own declared economic development goals.

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By Richard E Feinberg, Claudia Padrón Cueto
In a leap backwards, the Cuban government has published a massive compendium of tough new regulations governing the island’s struggling private enterprises. The new regulations—the first major policy pronouncement during the administration of President Miguel Díaz-Canel—appear more focused on controlling and restricting the emerging private sector than on stimulating investment and job creation, more concerned with capping wealth accumulation than in poverty alleviation.
Many small businesses that cater to foreign visitors are already suffering from Trump-era restrictions and travel warnings that have decimated the U.S. tourist trade in Havana. But the new regulations are more a product of domestic Cuban politics than foreign pressures.
On a positive note, the Cuban government promises to renew the granting of licenses for many categories of private businesses by year-end, repealing the extended suspension announced last summer. But the new regulations greatly empower government rule-makers and intrusive inspectors, casting a gray cloud over the island’s business climate. Many existing businesses are likely to retrench if not close altogether.
The private sector grew dramatically in recent years, to include nearly 600,000 owners and employees by official figures, with many more enterprising Cubans working informally; in contrast, the state sector stagnated and further decapitalized. Indeed, many thriving private businesses began to compete successfully against state entities, notably in restaurants, bars and night clubs, guest houses, construction, and transportation. The healthy wages paid by profitable private firms often eclipsed the meager salaries paid to disgruntled government officials and factory workers.
The extensive, highly detailed regulations, which go into effect in December, read like “the revenge of the jealous bureaucrat.” Drawing on a multitude of ministries and operating at all levels—national, provincial, and municipal—interagency committees will now be empowered to authorize, inspect, and regularly report upon private businesses under their jurisdictions. The regulations are replete with astoundingly specific performance requirements and innumerable legal breaches that seem crafted to allow government officials wide discrimination to impose heavy fines (or extort bribes), suspend licenses, and even seize properties.
To cite but a few such regulations: Private restaurants and guest houses must cook food at a minimum of 70 degrees Celsius for the time required for each food; day care centers must allocate at least two square meters per child, have no more than six children per attendant, and be outfitted with pristine bathroom facilities described in exquisite detail (private schools and academies are strictly prohibited); and private taxi drivers must document that they are purchasing fuel at government gas stations, rather than buying on the black market. Further, local officials can deny new licenses based on “previous analyses,” even if the proposed business plan meets all the other specifications, and can fix prices “when conditions warrant.”
The regulations could help shield state enterprises from unwanted private competition. The very ministries that stand to lose market shares are in charge of approving licenses in their sector. For example, the ministry of tourism has the lead in judging licenses for private guest houses. Appeals are possible, but to administrative authorities, not to judicial courts.
Government agencies are also seeking to reassert control over the island’s vibrant artistic communities. The regulations prohibit artists from contracting directly with private restaurants and bars; rather they must be represented by public-sector entities that charge commissions up to 24 percent of revenues. Moreover, performers must not use ... By Richard E Feinberg, Claudia Padrón Cueto
In a leap backwards, the Cuban government has published a massive compendium of tough new regulations governing the island’s struggling private enterprises. The new regulations—https://www.brookings.edu/opinions/a-backstage-pass-to-the-historic-u-s-cuba-thaw/A backstage pass to the historic U.S.-Cuba thawhttp://webfeeds.brookings.edu/~/552245002/0/brookingsrss/topics/cuba~A-backstage-pass-to-the-historic-USCuba-thaw/
Wed, 13 Jun 2018 20:44:37 +0000https://www.brookings.edu/?post_type=opinion&p=522595

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By Richard E Feinberg

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By Richard E FeinbergBy Richard E Feinberghttps://www.brookings.edu/research/how-to-think-about-the-summit-of-the-americas/How to think about the Summit of the Americashttp://webfeeds.brookings.edu/~/543557558/0/brookingsrss/topics/cuba~How-to-think-about-the-Summit-of-the-Americas/
Fri, 04 May 2018 19:38:19 +0000https://www.brookings.edu/?post_type=research&p=514868

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By Richard E Feinberg

Executive Summary

Convening in Lima, Peru on April 13-14, 2018, the eighth Summit of the Americas approved a final declaration tackling just one major theme—anti-corruption. This was appropriate: Systemic corruption in high places threatens to undermine the legitimacy of democratic institutions throughout the region. However, the summit failed to outline a rigorous plan of implementation, nor did governments pledge new resources for the anti-corruption agenda.

Summits of the Americas assemble not only heads of state and foreign ministries, but also a broad spectrum of citizenry, including from the corporate world and civil society. These parallel gatherings—well attended in Lima—signal a deepening of democracy and the community of the Americas.

Further, the Lima summit served as a platform where the larger, more powerful Latin American states reaffirmed their adherence to liberal democracy and categorically condemned its violation in Venezuela.

President Donald Trump canceled his attendance just a few days prior to the Lima summit. At the meeting, the United States became just one delegation among many, and an outlier on some core themes that had characterized previous Summits of the Americas.

Well institutionalized, Summits of the Americas will likely continue to take place every three years or so. The outcomes of future summits will depend upon effective leadership, diplomatic creativity, institutional capacities, and the abilities and desires of the governments of the Americas to learn from previous experiences and to find common ground.

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By Richard E Feinberg
Executive Summary
Convening in Lima, Peru on April 13-14, 2018, the eighth Summit of the Americas approved a final declaration tackling just one major theme—anti-corruption. This was appropriate: Systemic corruption in high places threatens to undermine the legitimacy of democratic institutions throughout the region. However, the summit failed to outline a rigorous plan of implementation, nor did governments pledge new resources for the anti-corruption agenda.
Summits of the Americas assemble not only heads of state and foreign ministries, but also a broad spectrum of citizenry, including from the corporate world and civil society. These parallel gatherings—well attended in Lima—signal a deepening of democracy and the community of the Americas.
Further, the Lima summit served as a platform where the larger, more powerful Latin American states reaffirmed their adherence to liberal democracy and categorically condemned its violation in Venezuela.
President Donald Trump canceled his attendance just a few days prior to the Lima summit. At the meeting, the United States became just one delegation among many, and an outlier on some core themes that had characterized previous Summits of the Americas.
Well institutionalized, Summits of the Americas will likely continue to take place every three years or so. The outcomes of future summits will depend upon effective leadership, diplomatic creativity, institutional capacities, and the abilities and desires of the governments of the Americas to learn from previous experiences and to find common ground. By Richard E Feinberg
Executive Summary
Convening in Lima, Peru on April 13-14, 2018, the eighth Summit of the Americas approved a final declaration tackling just one major theme—anti-corruption. This was appropriate: Systemic corruption ... https://www.brookings.edu/podcast-episode/what-to-expect-from-a-post-castro-cuba/What to expect from a post-Castro Cubahttp://webfeeds.brookings.edu/~/540125184/0/brookingsrss/topics/cuba~What-to-expect-from-a-postCastro-Cuba/
Wed, 18 Apr 2018 21:02:48 +0000https://www.brookings.edu/?post_type=podcast-episode&p=506954

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By Ted Piccone

Brookings Senior Fellow Ted Piccone discusses the future of U.S.-Cuba relations after Miguel Díaz-Canel was selected to succeed Raúl Castro as the next president of Cuba.

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By Ted Piccone
Brookings Senior Fellow Ted Piccone discusses the future of U.S.-Cuba relations after Miguel Díaz-Canel was selected to succeed Raúl Castro as the next president of Cuba.
Related content:
U.S.-Cuban relations are about to get worse
Cuba’s economy after Raúl Castro: A tale of three worlds
Tourism in Cuba: Riding the wave toward sustainable prosperity
Subscribe to Brookings podcasts here or on iTunes, send email feedback to bcp@brookings.edu, and follow us and tweet us at @policypodcasts on Twitter.By Ted Piccone
Brookings Senior Fellow Ted Piccone discusses the future of U.S.-Cuba relations after Miguel Díaz-Canel was selected to succeed Raúl Castro as the next president of Cuba.https://www.brookings.edu/blog/order-from-chaos/2018/04/16/u-s-cuban-relations-are-about-to-get-worse/U.S.-Cuban relations are about to get worsehttp://webfeeds.brookings.edu/~/539564522/0/brookingsrss/topics/cuba~USCuban-relations-are-about-to-get-worse/
Mon, 16 Apr 2018 15:32:28 +0000https://www.brookings.edu/?p=506086

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By Ted Piccone

The orchestrated presidential succession underway this week in Cuba, from Raúl Castro to his likely replacement Miguel Díaz-Canel, is prompting a new round of speculation about how the Trump administration should react to the long-awaited departure of the Castro brothers from power. Judging from the heated rhetoric between the U.S. and Cuban delegations at last week’s Summit of the Americas, relations are likely to go from bad to worse.

Shortly before the U.S. presidential election, candidate Donald Trump promised to “cancel” President Obama’s normalization policy. His administration made good on that promise last year with a number of measures rolling back key features of the incipient rapprochement. This included dire travel warnings, a dramatic 60 percent drawdown of U.S. embassy personnel in Havana, and the eviction of 17 staff from Cuba’s embassy in Washington last September in response to unexplained health incidents affecting U.S. diplomats.

These steps loudly signaled the return of Florida’s pro-embargo faction, led by Senator Marco Rubio, at the helm of U.S.-Cuba policy. Now, with the appointment of the more hardline John Bolton and Mike Pompeo to top national security positions, we should expect the White House to double down on its first year’s embrace of punitive regime change.

The handcuffs of the embargo and domestic politics

Ever since the nearly six decades of hostilities between Havana and Washington began, the United States has been locked in a narrow band of policy options. Even after the fall of the Soviet Union, the engine driving U.S. strategy remained a deep distrust of Cuba’s closed socialist system, fueled by the hundreds of thousands of nostalgic Cuban exiles concentrated in the swing state of Florida. Domestic politics prevails.

The rationale for tightening or loosening the comprehensive embargo established in the Kennedy administration has shifted, depending on the circumstances. The pivotal moment, however, was Congress’ decision to codify the embargo after the Cuban military shot down a plane piloted by Cuban exiles in 1996. This law—with its unilateral demands for the end of communist rule, the removal of the Castros from power, the establishment of free and fair elections, and full respect for human rights—severely handicapped any attempt by U.S. policymakers to adapt to changing circumstances, let alone construct an alternate route toward reconciliation and change.

Until the Obama administration. For a short period of two years, it forged a narrow path between a rock and a hard place, encompassing diplomatic recognition, bilateral cooperation in areas of mutual interest, continued U.S. support for the Cuban people’s claim for more political and economic freedom, and a call for Congress to lift the embargo. Obama took these steps after the Raúl Castro government adopted concrete actions toward reform such as reducing the size of the bloated public sector, opening new avenues for private sector entrepreneurs, and expanding personal liberties for Cubans to buy and sell property, access the internet, and travel on and off the island more freely. These mutually reinforcing dynamics contributed to a flourishing of Cuba’s non-state sector, which grew from a registered 150,000 self-employed workers in 2008 to 580,000 in 2017. Record numbers of Americans began seeing for themselves the realities of Cuban socialism, including thousands of Cuban Americans each year.

Whether or not one agrees with the Obama approach of constructive engagement, it took critics only a few months to declare it a bust for failing to force Cuba to adopt fundamental human rights and market economic reforms. This was, and remains, patently unrealistic. Some progress was made quickly: release of political prisoners; expanded cooperation on matters such as maritime security, drug trafficking, and counterterrorism; new commercial opportunities for American farmers and travel businesses; a significant drop in illegal immigration; and direct support to the Cuban private sector and religious communities.

Beyond these short-term gains, Obama’s strategic gambit was about laying the groundwork for long-term change, especially as a new generation of post-Castro leadership takes the helm this month. It was aimed at removing the Cuban government’s ability to paint the United States as its mortal enemy, a narrative it has used effectively for decades to consolidate its standing at home and around the world. It was also designed to build bridges for dialogue and reconciliation among Cubans on and off the island, which is at the heart of the problem, and triggered a flood of new exchanges and record levels of remittances to struggling Cuban families. Not surprisingly, large majorities in both countries applauded this new approach.

Bolton, Pompeo, and Rubio

For the vocal constituency of Cuban exiles and their families, who bear bitter feelings toward the Castro regime, Obama’s March 2016 handshake with Raúl was sacrilege. They found, among the many Republicans who support their cause, a late convert in Donald Trump who, in the final stretch of his presidential campaign, hardened his position on Cuba, promising a crowd in Miami that he would reverse Obama’s executive orders “unless the Castro regime meets our demands.” The following June, surrounded by veterans of the failed Bay of Pigs operation in the heart of Miami’s Little Havana, President Trump delivered a theatrical rebuke of Obama’s opening toward Cuba and set in motion new rules to restrict individual travel and prohibit any dealings with Cuba’s leadership or military, police, and security officials and their business entities.

For Senator Rubio, the architect of Trump’s hardline approach toward Cuba, this tightening of the screws was not enough. The new rules, for example, allowed any previously negotiated business deals to remain intact, permitted air and cruise ship travel to continue, and kept Cuba off the state sponsors of terrorism list. (Obama’s authorization of unlimited travel and remittances for Cuban Americans, popular in Miami, notably went untouched.) When mysterious ailments affecting over 20 U.S. personnel were reported in the late summer of 2017, Rubio and his allies jumped on the opportunity to demand additional steps to punish the Cuban government for failing to prevent or explain the source of the incidents. Trump ordered diplomats in both countries to go home and issued severe travel warnings. The result: a dramatic reduction in the number of Americans visiting the island, and vice versa. This directly undermines the administration’s purported goal of supporting Cuba’s burgeoning private sector, which U.S. visitors help sustain.

Now, enter John Bolton and Mike Pompeo, stage right. Both have strongly criticized the Castro government and vociferously opposed Obama’s overtures to Havana. Bolton, who was roundly criticized in the 2000s for his unfounded allegation that Cuba was developing biological weapons, wroteas recently as January that “Russian meddling in Latin America could inspire Trump to reassert the Monroe Doctrine (another casualty of the Obama years) and stand up for Cuba’s beleaguered people (as he is now for Iran’s).” Given Russia’s expanding security and economic relationship with Havana, and the general hardening of U.S. policy toward Moscow, this is no longer an abstract notion. Bolton also doubted whether the Cuban regime can survive much longer, a perennial claim used to justify more punitive sanctions, despite Cuba’s ability to withstand five decades of the U.S. embargo, threats, attacks, and assassination attempts.

Pompeo, who initially endorsed Marco Rubio for president, was highly critical of Obama’s visit to the island in 2016 and defended retaining the U.S. detention facility at Guantanamo Bay. Although his Senate confirmation testimony on April 12 promised to improve relations with Cuba and rebuild diplomatic staff, Pompeo made no specific commitments on how or when this would occur.

From a national security perspective, it is hard to understand why Cuba occupies so much high-level attention.

We should expect a continued mind meld among these three key actors in the U.S.-Cuban drama. Senator Rubio, with colleagues from the Florida delegation, has already called on the White House to “denounce Castro’s successor as illegitimate in the absence of free, fair, and multiparty elections, and call upon the international community to support the right of the Cuban people to decide their future.” Rubio then traveled to the Summit of the Americas in Lima with Vice President Pence, who declared Cuba “a despotic regime” and blamed it for exporting its “failed ideology” to Venezuela and beyond. In response, Cuban Foreign Minister Bruno Rodríguez harshly attacked both Pence and Rubio for decades of “U.S. imperialism,” denounced U.S. political corruption, and blamed the Miami “mafia” for hiding terrorists. Not surprisingly, the region remains divided on how to respond.

From a national security perspective, it is hard to understand why Cuba occupies so much high-level attention, given the much more serious security challenges Washington faces. Cuba can barely keep its armed forces trained and equipped, and is falling short on many economic and social fronts as well, prompting thousands of Cubans to vote with their feet every year and risk the perilous journey to the United States or elsewhere. The deterioration in relations also adds pressure on Cuba to turn to Moscow and Beijing for more help, a prospect that directly runs counter to U.S. interests.

In the end, what matters most to this administration is the power many of those same Cubans wield by supporting politicians who want the total collapse of the Cuban regime. The Bolton-Pompeo-Rubio triangle, hand in hand with Trump and Pence, will gladly meet their needs, and then some.

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By Ted Piccone
The orchestrated presidential succession underway this week in Cuba, from Raúl Castro to his likely replacement Miguel Díaz-Canel, is prompting a new round of speculation about how the Trump administration should react to the long-awaited departure of the Castro brothers from power. Judging from the heated rhetoric between the U.S. and Cuban delegations at last week’s Summit of the Americas, relations are likely to go from bad to worse.
Shortly before the U.S. presidential election, candidate Donald Trump promised to “cancel” President Obama’s normalization policy. His administration made good on that promise last year with a number of measures rolling back key features of the incipient rapprochement. This included dire travel warnings, a dramatic 60 percent drawdown of U.S. embassy personnel in Havana, and the eviction of 17 staff from Cuba’s embassy in Washington last September in response to unexplained health incidents affecting U.S. diplomats.
These steps loudly signaled the return of Florida’s pro-embargo faction, led by Senator Marco Rubio, at the helm of U.S.-Cuba policy. Now, with the appointment of the more hardline John Bolton and Mike Pompeo to top national security positions, we should expect the White House to double down on its first year’s embrace of punitive regime change.
The handcuffs of the embargo and domestic politics
Ever since the nearly six decades of hostilities between Havana and Washington began, the United States has been locked in a narrow band of policy options. Even after the fall of the Soviet Union, the engine driving U.S. strategy remained a deep distrust of Cuba’s closed socialist system, fueled by the hundreds of thousands of nostalgic Cuban exiles concentrated in the swing state of Florida. Domestic politics prevails.
The rationale for tightening or loosening the comprehensive embargo established in the Kennedy administration has shifted, depending on the circumstances. The pivotal moment, however, was Congress’ decision to codify the embargo after the Cuban military shot down a plane piloted by Cuban exiles in 1996. This law—with its unilateral demands for the end of communist rule, the removal of the Castros from power, the establishment of free and fair elections, and full respect for human rights—severely handicapped any attempt by U.S. policymakers to adapt to changing circumstances, let alone construct an alternate route toward reconciliation and change.
Until the Obama administration. For a short period of two years, it forged a narrow path between a rock and a hard place, encompassing diplomatic recognition, bilateral cooperation in areas of mutual interest, continued U.S. support for the Cuban people’s claim for more political and economic freedom, and a call for Congress to lift the embargo. Obama took these steps after the Raúl Castro government adopted concrete actions toward reform such as reducing the size of the bloated public sector, opening new avenues for private sector entrepreneurs, and expanding personal liberties for Cubans to buy and sell property, access the internet, and travel on and off the island more freely. These mutually reinforcing dynamics contributed to a flourishing of Cuba’s non-state sector, which grew from a registered 150,000 self-employed workers in 2008 to 580,000 in 2017. Record numbers of Americans began seeing for themselves the realities of Cuban socialism, including thousands of Cuban Americans each year.
Whether or not one agrees with the Obama approach of constructive engagement, it took critics only a few months to declare it a bust for failing to force Cuba to adopt fundamental human rights and market economic reforms. This was, and remains, patently unrealistic. Some progress was made quickly: release of political prisoners; expanded cooperation on matters such as maritime security, drug trafficking, ... By Ted Piccone
The orchestrated presidential succession underway this week in Cuba, from Raúl Castro to his likely replacement Miguel Díaz-Canel, is prompting a new round of speculation about how the Trump administration should react to ... https://www.brookings.edu/blog/order-from-chaos/2018/04/09/seven-questions-to-ask-about-cubas-economy-as-raul-castro-steps-down-as-president/Seven questions to ask about Cuba’s economy as Raúl Castro steps down as presidenthttp://webfeeds.brookings.edu/~/538032138/0/brookingsrss/topics/cuba~Seven-questions-to-ask-about-Cuba%e2%80%99s-economy-as-Ra%c3%bal-Castro-steps-down-as-president/
Mon, 09 Apr 2018 13:55:04 +0000https://www.brookings.edu/?p=504026

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By Richard E Feinberg

Cuban President Raúl Castro broke important taboos in the country by legitimizing the key concepts of global economic integration, foreign investment, and private initiative. But not all of his colleagues in the Cuban Communist Party (PCC)—one of whom will take the reins on April 19, when Raúl formally steps down—are following in lock-step. (By all accounts, Miguel Díaz-Canel Bermúdez, currently the first vice president, will be the next president of Cuba.) Over six decades, the vanguard party has become the rearguard party, lagging badly behind popular opinions and aspirations. The historic task of the successor generation will be to bridge that governance gap—and to give the Cuban population the quality economic governance it so rightly deserves.

Economic reform is not easy. It requires a committed political leadership, an empowered team of smart technocrats, and well-prepared bureaucrats able and willing to execute orders. It also requires public support from well-informed and enthusiastic constituencies. Recent reform efforts have suffered from shortcomings in each of these areas.

The government in Havana is accustomed to relying on the PCC and its mass organizations (among labor, women, and youth) as its power base. This strategy ignores the newly emerging forces in Cuban society that could expand the bases of support for reform policies. The growing private economy may compete with some state-owned enterprises, but if properly cultivated could become an important pillar of a pro-reform movement (as the Chinese Communist Party has recognized). Educated technocrats in and out of government would likely embrace a reform drive; working with international agencies, the government could initiate a large-scale program of advanced training at overseas universities and institutes in reform-related topics. Similarly, the government has tended to tolerate its cultural elites, striking out only when directly challenged; more positively, the authorities could recognize that many of its cosmopolitan compatriots would embrace policies of economic openness and pluralism.

As the new administration takes charge this month (even as Raúl Castro will remain head of the PCC), observers should watch for these indicators to determine the likely pace and depth of economic reforms, and whether the new government has a political vision to achieve its goals:

1Does the new administration articulate a clear economic reform strategy that is at the same time ambitious but realistic, that sets priorities, and that addresses some of the key issues outlined here, including the tripartite hybrid economy (state and private economies and foreign investment), and declare that higher output in agriculture and energy are urgent matters of national security?

2Does the new administration appoint and empower a dynamic team of reform-minded ministers and senior advisers?

3Does the administration reach out to build constituencies outside of the PCC inner core, to engage the private economy, the educated middle classes, and independent civil society organizations (even as many are already PCC members)?

4Do authorities perceive an expanding private economy as a threat to the state or as a welcome partner in growth?

5Does the government telecommunications monopoly, ETECSA, accelerate broad public access to the internet—critical not only for democratizing information flows but also for economic modernization? If implemented promptly, the reported plans for an undersea fiber optic cable from Mexico to Cuba appear promising.

6Does the government recognize the widening gaps in income and opportunity and therefore accompany disruptive changes with well-resourced measures to assist at-risk populations?

7Does the executive branch pursue political reforms, promised earlier but seemingly sidetracked, to begin to decentralize some political power to the national legislature and provincial and municipal entities? Such political decentralization would reinforce an economic reform agenda.

The new administration in Havana may prefer to move gradually, initially to focus perhaps on monetary reform and on a limited list of low-hanging fruit, as it consolidates its own political position. Even so, it could begin to enunciate its medium-term strategy, to give the population some confidence that a more prosperous future awaits.

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By Richard E Feinberg
Cuban President Raúl Castro broke important taboos in the country by legitimizing the key concepts of global economic integration, foreign investment, and private initiative. But not all of his colleagues in the Cuban Communist Party (PCC)—one of whom will take the reins on April 19, when Raúl formally steps down—are following in lock-step. (By all accounts, Miguel Díaz-Canel Bermúdez, currently the first vice president, will be the next president of Cuba.) Over six decades, the vanguard party has become the rearguard party, lagging badly behind popular opinions and aspirations. The historic task of the successor generation will be to bridge that governance gap—and to give the Cuban population the quality economic governance it so rightly deserves.
Economic reform is not easy. It requires a committed political leadership, an empowered team of smart technocrats, and well-prepared bureaucrats able and willing to execute orders. It also requires public support from well-informed and enthusiastic constituencies. Recent reform efforts have suffered from shortcomings in each of these areas.
The government in Havana is accustomed to relying on the PCC and its mass organizations (among labor, women, and youth) as its power base. This strategy ignores the newly emerging forces in Cuban society that could expand the bases of support for reform policies. The growing private economy may compete with some state-owned enterprises, but if properly cultivated could become an important pillar of a pro-reform movement (as the Chinese Communist Party has recognized). Educated technocrats in and out of government would likely embrace a reform drive; working with international agencies, the government could initiate a large-scale program of advanced training at overseas universities and institutes in reform-related topics. Similarly, the government has tended to tolerate its cultural elites, striking out only when directly challenged; more positively, the authorities could recognize that many of its cosmopolitan compatriots would embrace policies of economic openness and pluralism.
As the new administration takes charge this month (even as Raúl Castro will remain head of the PCC), observers should watch for these indicators to determine the likely pace and depth of economic reforms, and whether the new government has a political vision to achieve its goals:
1Does the new administration articulate a clear economic reform strategy that is at the same time ambitious but realistic, that sets priorities, and that addresses some of the key issues outlined here, including the tripartite hybrid economy (state and private economies and foreign investment), and declare that higher output in agriculture and energy are urgent matters of national security?
2Does the new administration appoint and empower a dynamic team of reform-minded ministers and senior advisers?
3Does the administration reach out to build constituencies outside of the PCC inner core, to engage the private economy, the educated middle classes, and independent civil society organizations (even as many are already PCC members)?
4Do authorities perceive an expanding private economy as a threat to the state or as a welcome partner in growth?
5Does the government telecommunications monopoly, ETECSA, accelerate broad public access to the internet—critical not only for democratizing information flows but also for economic modernization? If implemented promptly, the reported plans for an undersea fiber optic cable from Mexico to Cuba appear promising.
6Does the government recognize the widening gaps in income and opportunity and therefore accompany disruptive changes with well-resourced measures to assist at-risk populations?
7Does the executive branch pursue political reforms, promised earlier but seemingly sidetracked, to begin to decentralize some political power to the national legislature and ... By Richard E Feinberg
Cuban President Raúl Castro broke important taboos in the country by legitimizing the key concepts of global economic integration, foreign investment, and private initiative. But not all of his colleagues in the Cuban ... https://www.brookings.edu/es/research/la-economia-de-cuba-despues-de-raul-castro/La economía de Cuba después de Raúl Castrohttp://webfeeds.brookings.edu/~/561850726/0/brookingsrss/topics/cuba~La-econom%c3%ada-de-Cuba-despu%c3%a9s-de-Ra%c3%bal-Castro/
Fri, 16 Mar 2018 15:23:35 +0000https://www.brookings.edu/?post_type=research&p=497741